Best Investment Accounts for Beginners in Nairobi
An investment account is also known as a brokerage account.
You deposit money into the account the same way you would a bank accou
Once there is money in the account you can instruct the broker to buy stocks and or bonds or mutual funds.
All investments account have a “money market account” inside them. The money market account is where the money goes when you deposit it, and where the money comes from when stocks are purchased.
10% of 400 is only $40, you will need to accumulate a much larger amount than that in order to get any benefit from investments in the stock market.
So after you open the account you will just be depositing cash into your money market account until you have a set amount. Once you reach a good amount you can instruct your broker to buy stocks or bond with the money.
1. Ownership Investments
Ownership investments are what comes to mind for most people when the word “investment” comes to mind. They are the most unpredictable and profitable type of investment. The following are examples of ownership investments:
Stocks: A stock is literally a certificate that says you own a portion of a company. When you buy one of these investments, you have a right to a part of a company’s value or a right to carry out a certain action (as in a futures contract).
Your expectation of profit is realized (or not) by how the market values the asset you own the rights to. If you own shares in A company and the company posts a record profit, other investors are going to want \ shares too. Their demand for shares drives up the price, increasing your profit if you choose to sell the shares.
Business: The money put into starting and running a business is an investment. Entrepreneurship is one of the hardest investments to make because it requires more than money. By creating a product or service and selling it to people who want it, entrepreneurs can make huge personal fortunes. example.
Real Estate: Houses, apartments or other dwellings that you buy to rent out or repair and resell are investments. However, the house you live in is a different matter because it is filling a basic need. It fills a need for shelter and, although it may appreciate over time, shouldn’t be purchased with an expectation of profit.
Precious objects and collectibles: . Precious metals and collectibles are not a good investment for some reasons, but they can be classified as an investment . Like a house, they have a risk of physical depreciation (damage) and upkeep and storage costs .
2. Lending Investments
Lending investments allow you to be the bank. They tend to be lower risk than ownership investments and return less as a result. A bond issued by a company will pay a set amount over a certain period. While during the same period the stock of a company can double or triple in value, paying far more than a bond. Or it can lose and go bankrupt, in which case bondholders usually still get their money and the stockholder often gets nothing.
Your savings account: Even if you have nothing but a regular savings account, you can call yourself an investor. You are essentially lending money to the bank, which it will dole out in the form of loans. The return is currently quite low, but the risk is also next to nil .
Bonds: Bond is a catch-all category for a wide variety of investments. The risks and returns vary widely between the different types of bonds, but overall, lending investments pose a lower risk and provide a lower return than ownership investments.
3. Cash Equivalents
These are investments that are “as good as cash,” which means they’re easy to convert back into cash.
Money market funds: With money market funds, the return is very small, 1% to 2%, and the risks are also small. Although money market funds have “broken the buck” in recent memory. Money market funds are also more liquid than other investments, meaning you can write checks out of money market accounts as you would with a checking account.
How to start an investment Account for Beginners in Nairobi
2) Fill out your detials
3) BEgin in your documents
4) You are good to go.